Restructuring Power Sector in India

Several countries, both in the west and in the east, developed and underdeveloped, have introduced reforms in the power sector. In all cases, restructuring revolved around the economic and institutional organisation of the sector and the advantages of introducing competition to raise the overall efficiency in the sector. In India, the reforms already initiated, at the federal level, have been the enactment of laws which enable setting up of regulatory commissions at the central and state levels; provide for separation of generation and transmission as distinct activities; recognise central and state transmission utilities as government companies; allow setting up of private transmission lines within the overall supervision of operation of the government transmission utility; and provide for regulation of transmission by the central and state regulators. Orissa and Haryana had initiated reforms before central legislation and others followed later. This paper attempts to study the initiatives taken in different parts of the world and the benefits of restructuring wherever visible. For India, the paper studies the present stage of restructuring and identifies the programme for the future.